Profit, loss, and record-keeping
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Introduction
Students develop an understanding of how and why successful businesses keep records. They engage in a hypothetical dog-walking business to practise keeping a business journal and understand the importance of doing so.
This activity provides a foundation for students to understand how businesses can meet their obligations, including those to the ATO.
Achievement standard
By the end of Year 7, students describe the interdependence of consumers and producers in the market. They explain the importance of short- and long-term planning to individual and business success and identify different strategies that may be used. They describe the characteristics of successful businesses and explain how entrepreneurial capabilities contribute to this success. Students identify the reasons individuals choose to work and describe the various sources of income that exist.
When researching, students develop questions and gather data and information from different sources to investigate an economic or business issue. They interpret data to identify trends. They propose alternative responses to an issue and assess the costs and benefits of each alternative. They apply economics and business knowledge, skills and concepts to familiar problems. Students develop and present conclusions using appropriate texts, terms and concepts. They identify the effects of their decisions and the possible effects of alternative actions.
Content descriptions
Economics and Business Knowledge and Understanding
Why and how individuals and businesses plan to achieve short-term and long-term personal, organisational and financial objectives (ACHEK018).
Characteristics of entrepreneurs and successful businesses (ACHEK019).
Economics and Business Skills
Apply economics and business knowledge, skills and concepts in familiar and new situations (ACHES025).
Teacher resources
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Profit, loss, and record keeping
Student learning resources
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Now you’re in business
Suggested activity sequence
This sequence is intended as a framework to be modified and adapted by teachers to suit the needs of a class group.
- Use the visualiser to outline the concepts of businesses, profits, loss and factors that lead to business success.
- Explain to students that they will be opening a dog-walking business.
- Ask:
- What risks might you encounter in this business?
- What earnings might you receive?
- What expenses might you have?
- Use a grouping strategy to organise students into groups of 2 or 4.
- Explain the task to students. If necessary, model the task to students on the board. In this example, the rate per each 10 minutes is $2.00.
Day Scenario description Money earned Expenses Total money Monday Cam – 1 dog, 40 mins $8.00 $8.00 Monday Bought a ball $5.00 $3.00 Tuesday Chi – I dog – 10 mins $2.00 $5.00 - Groups complete the worksheet.
- Invite groups to share their findings. Prompts, drawn from the worksheet, include:
- Did your dog-walking business make a profit or a loss in its first week? What actions could you take to increase your profits?
- What are some of the things you have to know in order to keep an accurate ledger?
- Why is it important to keep a ledger? How will keeping a ledger contribute to business success?
- Students write a short statement explaining why keeping business records is important to business success and how not doing so might lead to business failure.